Budget 2015; SMEs could see smaller profits after Summer Budget

Leeds-based accountancy firm Thomas Coombs fears that measures introduced in the Chancellor’s Summer Budget will affect the profit margins of SMEs.

George Osborne’s seventh Budget – the first of this Conservative Government – heralded a decrease in Corporation Tax but saw a rise in dividend taxes.

Christopher Darwin, Partner at the UK200Group firm Thomas Coombs said: “SMEs will see significant changes to dividend taxation from April 2016, which will impact on the overall tax rates and the effective tax rates on extracting profits.

“Furthermore, the introduction of the National Living Wage is going to be a big cost for SMEs. Even though it has been marginally offset by an increase in the employment allowance, the effect of paying higher wages – which is a fixed overhead – will ultimately be smaller profits,” added Christopher Darwin.

In a bid to create what George Osborne called “a permanent change to incentivise investment”, the Annual Investment Allowance will no longer fall to £25,000, but will be frozen at £200,000 from 1 January 2016. However, Christopher Darwin notes that the temporary £500,000 limit was set to expire on 31 December 2015, but will now be a permanent relief available at a reduced rate of £200,000. “It is a shame that the Chancellor didn’t choose to keep the Annual Investment Allowance at the current level and show a true commitment to boosting productivity for SMEs for the rest of the parliament.”

For more information, please contact Christopher Darwin.

Business confidence remains high

Leeds based Thomas Coombs has commented on news that, according to the latest Business in Britain report from Lloyds Bank, overall business confidence remains strong and stable.

This positive attitude is largely underpinned by companies’ expectations of an improvement in exports, as well as an anticipated increase in investment levels.

The twice-yearly Lloyds Bank report gathers the views of 1,500 UK companies – predominantly small to medium sized businesses, or SMEs – and tracks the overall balance of opinion on a range of important performance and confidence measures.

The report’s overall key confidence index, which looks at businesses sentiment over the coming six months, has remained stable at 43 per cent compared with January 2015. Although the latest reading is down from the survey’s high of 53 per cent recorded 12 months ago, it remains above the long-term average reading of 23 per cent. Expectations of employment growth and a resurgent export market suggest strong economic prospects for the second half of the year.

Christopher Darwin, Partner at Thomas Coombs said: “Some 29 per cent of the firms surveyed said that weaker UK demand poses the greatest threat to their business in the next six months. This could explain why firms expect to increase their sales in global markets.”

The net balance of exporters expecting an increase in total exports across the globe has risen to 46 per cent. This has been boosted by firms’ intentions to export to growing regions such as the Middle East and Africa. In particular, the increase in total exports has been driven by the number of exporters expecting an increase in trade with Europe in the next six months.

“Business confidence has remained relatively strong with encouraging expectations for sales, orders and profits for the rest of the year,” noted Christopher Darwin “This has been underlined by a bounce back in exports to Europe as well as companies’ intentions to grow their presence further on the international stage. However, we’ll be keeping an eye on how the situation in Greece affects British SMEs,” they concluded.

For further details contact Christopher Darwin

THOMAS COOMBS CHARITY (WY-SME) INDEX: June 2015 Update

We are proud to report on the latest Thomas Coombs Charity (WY-SME) Index update. The specialist charity accountants within our practice have constructed this index from available data on West Yorkshire based registered charities which meet the criteria of a small or medium sized enterprise.

These charities represent a Yorkshire powerhouse of third sector activity with a combined income of £0.7 Billion and £1.0 Billion of assets.

Since March 2015 a significant proportion of the financial records of charities comprising the index have been updated. The index is now comprised of 863 charities.

Of the 143 charities filing a change in income there was an aggregate 2.7% fall in annual income. This clearly shows that the austerity conditions within the West Yorkshire charity sector are still firmly with us.

There is a wealth of information within the database. If you wish to receive more detailed benchmarking analysis with reference to your charity please do not hesitate to contact Christopher Darwin as the head of our charities department on 0113 2449512 or charities@thomascoombs.com

 

Thomas Coombs

July 2015 Monthly Technical Update

AUDIT & ACCOUNTING UPDATE

 

Charity SORP consultation opensThe Joint-SORP making body is consulting on three matters that affect the 2015 versions of the Charities SORPs.

  • The FRC consultation on amendments to FRS 102 for periods commencing on or after 1 January 2016;
  • The planned removal of the FRSSE; and
  • A revised definition of ‘larger charity’ in the SORPs.

Proposals include bringing small charities that are required to prepare accruals accounts into the scope of SORP 2015 (FRS 102). It is proposed, however, that the requirement to prepare a statement of cash flows will only be mandatory for larger charities. The definition of a larger charity (proposed as gross income exceeding £500,000 UK / €500,000 ROI) is also being consulted on.

The consultation is open until 18 September 2015. For more information and detail of how to respond to the consultation, click here.

 

TAXATION

 

Telegraph reveals HMRC amnesty for late filing penaltiesAccording to the Telegraph, up to 890,000 people who filed late tax returns have been given an amnesty over the £100 fine for missing the deadline.  To read more, please click here.HMRC have now sought to clarify their position.

 

RTI late filing penaltiesIn addition, HMRC are also taking a risk-based approach to penalties for late RTI returns. Read the news story here.

 

HMRC issue guidance on APNsHMRC have released guidance on follower notices and accelerated payments.

 

Changes to the advisory fuel rates from 1 June 2015

Engine size Petrol – amount per mile
1400cc or less 12p (11p)
1401cc to 2000cc 14p (13p)
Over 2000cc 21p (20p)

 

Engine size Diesel – amount per mile
1600cc or less 10p (9p)
1601cc to 2000cc 12p (11p)
Over 2000cc 14p (14p)

 

Engine size LPG – amount per mile
1400cc or less 8p (8p)
1401cc to 2000cc 9p (10p)
Over 2000cc 14p (14p)

Hybrid cars are treated as either petrol or diesel cars for this purpose.

For more information, click here.

 

LATEST BLOGS FROM OUR TECHNICAL PARTNER MERCIA GROUP

 

Difficulties with Business Property ReliefBy Mark Morton
A New Register Required for Every Limited CompanyBy Andrew Güntert
Investment PropertiesSo what is the big deal with FRS 102 and Investment Properties?Can I get away with using depreciated cost model?

By Jenny Faulkner

 

Thomas Coombs says that SMEs should get back to doing what they do best

UK SMEs are spending over 600,000 hours a year on company administration rather than core business activities.

That’s according to research carried out for the British Insurance Brokers’ Association (BIBA) which reveals that a significant number of SME leaders perform a lot of tasks outside their job descriptions, instead of outsourcing these to specialists.

The Populus-conducted survey of 500 directors, senior managers and owners of British businesses with between 10 and 249 employees, says that 26 per cent of SME leaders deal with IT issues, which costs them on average 52 hours a year. Most time consuming of all was HR, which costs 23 per cent of SMEs more than 60 hours per year.

Christopher Darwin, Partner, at Thomas Coombs said: “This research shows that an astonishing amount of time is being wasted conducting tasks when SME leaders could be serving their customers and generating income. If we scale this up for the UK’s 5.2 million SMEs, then around 624,000 hours are wasted each week on non-business critical tasks.

“Frequently, SME leaders are handling tasks that fall outside their specialist knowledge, but this is where Thomas Coombs can help. We can assist SMEs with issues such as payroll services and can provide advice on tax, auto-enrolment and financing,” added Christopher Darwin.

Thomas Coombs can take an holistic approach to the needs of your SME and advise on how you can focus on running your business. If you would like more information, please Christopher Darwin at Thomas Coombs, The Yorkshire Accountants. 

Stuart Adam, Thomas Coombs

More UK start-ups survive first year of business than European counterparts

Leeds based Thomas Coombs has commented on a recent study that shows more of Britain’ start-ups are surviving their first year of business than their European peers.

The research conducted by Rosseau Associates highlights that of the 234,000 UK businesses launched in 2011, 93 per cent of start-ups survived their first year of business. This compares to an average survival rate of 83 per cent across Europe.

Britain’s start-up scene has enjoyed considerably more robust health than Europe’s other major economies of France (79 per cent) and Germany (78 per cent), and has experienced the strongest economic growth in Europe as a whole.

Stuart Adam, Partner at Thomas Coombs said: “This is very encouraging news for Britain’s SMEs and shows that we really are leading the way. Despite the tough economic conditions of recent years, the recession appears to have created innovation and entrepreneurs, so Britain’s start-ups are clearly flourishing. Add to that the recent Enterprise Bill and perhaps we will see an even higher survival rate in the coming years. “Business Secretary Sajid Javid said last month that small businesses are ‘Britain’s engine room’ and at Thomas Coombs, we’re proud to be able to assist SMEs and offer a range of services for business owners.”

If you would like advice on how to grow your business and achieve success, please contact Stuart Adam, Partner.

Thomas Coombs is reminding people to renew their tax credits on time

Hundreds of people could miss out on tax credits if they fail to renew their claim by the deadline next month, says Christopher Darwin, Partner at Leeds-based Thomas Coombs.

The deadline for renewing tax credits is 31 July 2015, but Thomas Coombs is advising claimants to get their information in before this date to avoid complications.

The advice comes after the Institute of Chartered Accountants for England and Wales’ Tax Faculty received reports that a number of claimants had struggled to get through to HM Revenue & Customs (HMRC) Tax Credit Helpline.

Renewing a tax credit claim gives HMRC the information required to finalise tax credit awards for the previous year and renews the claim – if claimants remain eligible – for the next year.

People who claimed tax credits in 2014/15 should already have received a renewal pack earlier this year, which is designed to help with the application.

Christopher Darwin said: “Tax credits are an important part of many people’s lives and failing to renew your claim could represent a significant loss of income.

“While tax credits were traditionally handled over the phone, people now have the option to renew their claim online, but they need to do so soon to ensure that they continue receiving payments in 2015/16.”

Before renewing online, claimants need to register with Verify, an identity-checking process, which requires claimants to answer a number of questions and submit identification information.

If you would like assistance with any claims for tax credits or would like assistance resolving issues with HMRC, please contact Christopher Darwin.

Businesses reminded to hand out P60 forms before the end of the month

Leeds based Chartered Accountants are reminding business owners to provide all of their employees with a P60 form before the deadline at the end of May.

All employers must provide any employee, who was in their employment on the last day of the tax year (5 April), with a P60 certificate by 31 May 2015 at the latest.

A P60 certificate should summarise each employee’s total pay and deductions for the last year, and can be provided in paper or electronic form.

For some businesses P60 certificates will be produced automatically by their payroll system, but for others it may be their responsibility to provide employees with a form. If payroll software does not automatically produce P60 forms businesses can order copies directly from HM Revenue & Customs (HMRC).

Failure to provide an employer with a P60 could lead to your business being investigated by HMRC and in serious cases could lead to a fine.

Andrew Cowe, Senior Tax Manager at Thomas Coombs, said: “Unlike other deadlines set by HMRC, the cut off date for sending P60 forms to employees does not entail an automatic penalty fine.

“However, P60 forms are an important part of an individual’s tax documentation for the year and can affect their ability to claim benefits, reclaim overpaid tax and even buy a house.

“I would encourage all business owners to ensure that their employees receive a P60 form before the deadline, in order to avoid any potential problems further down the line.”

If you would like help with managing your business’s payroll service, please contact Andrew Cowe, Senior Tax Manager.

Businesses need to be aware of escalating auto-enrolment fines

A number of businesses who have failed to sign staff up to a workplace pension scheme have been hit with escalating fines by the Pensions regulator for the first time and Andrew Cowe, Senior Tax Manager at Thomas Coombs is warning other firms not to get caught out.

Under current workplace pension rules, all employers with at least one member of staff have to undertake certain duties, including enrolling those who are eligible into a workplace pension scheme and contributing towards it.

Under this process, known as auto-enrolment, businesses must meet certain requirements by their set staging date, which is based upon the number of people they employ.

Those that miss their staging date are initially sent a statutory notice reminding them to comply however, those who persistently and deliberately refuse to comply, or who breach workplace pension rules, could face a fixed penalty notice of £400.

Failure to pay this fixed penalty notice could lead to a series of escalating fines, with a prescribed daily rate of £50 to £10,000, depending on the number of staff the business employs.

Andrew Cowe at Leeds based accountancy firm,  said: “So far the Pensions Regulator has only handed out escalating penalty notices to four firms, but this number is likely to increase as more staging dates pass.

“All businesses in the UK with at least one employee are expected to create a workplace pension scheme for their employees by the end of 2018 and most will already be aware of their staging dates, if it has not already passed.

“Failing to enrol staff into a workplace pension carries with it the prospect of hefty fines that could have a significant impact on you and your company.”

Andrew Cowe added that firms need to take penalty notices seriously as the Pensions Regulator has confirmed that they will take civil action through the courts to recover penalties and will prosecute employers who deliberately and wilfully fail to comply with their duties.

If you are concerned about auto-enrolment or have been issued a penalty notice then it is important you consult an accountant sooner rather than later to ensure you do not incur any serious fines.

For more information please contact Andrew Cowe, Senior Tax Manager, Thomas Coombs Accountants.

“Yorkshire Day” comes early as Thomas Coombs launch rebrand

“Yorkshire Day” has come early for Thomas Coombs, a Leeds based tax and accountancy firm. Known already by their clients as the Yorkshire Accountants, the firm decided the time was right to bring their brand into the 21st century. The partners believe they now have something that truly reflects who they are as a business, whilst retaining their traditional Yorkshire roots.

“The decision to rebrand was something we considered very carefully. We have many long standing clients, some who have been with us for decades, and wanted to ensure that the update was more of an evolution, rather than a revolution. Retaining our Yorkshire heritage was incredibly important to us.” said Christopher Darwin, one of the partners at the firm.

Thomas Coombs are one of the oldest and most respected independent firms in Yorkshire and have been trading since 1878. The firm was founded by Thomas Coombs, a chartered accountant. Since then, the firm has grown to 4 partners, 25+ employees and is a member of the UK200 Group.

David Jones, Managing Director at Sun Jones said “It’s been an exciting challenge for us to bring the Thomas Coombs brand up to date. We’ve worked very closely with the partners to ensure all aspects of the brand are consistent and convey the right message. The Thomas Coombs logo in particular is a blend of old and new, featuring the traditional Yorkshire Rose but with a modern twist. Thomas Coombs now have a brand that matches their exceptional service”.

Find out more about Thomas Coombs by visiting www.thomascoombs.com